House Finance advances bill to phase out income tax on Social Security – Dominion Post

Gov. Jim Justice’s call to eliminate the personal income tax on Social Security has become a three-year phase-out under a bill advanced Friday by the House Finance Committee.

Leaders of the committee said they want to provide a tax break for seniors while also being cautious about the state’s budget.

“It has been our custom, as well as our prudence, that we generally phase tax cuts in,” House Finance Chair Vernon Criss, R-Wood, said Friday afternoon in response to a delegate question about the multi-year approach.

The estimated financial effect of fully eliminating income taxes on Social Security benefits would be a little more than $37 million. Criss noted that the state is still monitoring the effects of other recent cuts such as a major personal income tax cut and rebates for personal property taxes on vehicles — as well as another potential personal income tax cut prompted by an economic trigger.

“I took the prudent approach as a phase-in,” Criss said.

Delegate Daniel Linville, R-Cabell, said he supports the bill but believes the full Social Security exemption could come right now.

“I wish and I do believe that we have the ability, every ability to do it now,” Linville said.

The Social Security proposal is one of three tax breaks the governor proposed during his State of the State speech. One is a state child and dependent care tax credit. The other would expand the senior citizen homestead property tax cut. The administration estimated the three tax breaks combined add up to about $50 million.

The legislation advanced by delegates Friday would build on a 2019 bill signed into law by the governor to exempt Social Security income from personal income taxes for most West Virginians, particularly those in lower tax brackets. That was also a three-year phase-in.

This proposal would exempt those in higher brackets from being taxed on Social Security benefits. The bill was introduced in the House of Delegates as HB 4880.

The Justice administration says 50,000 senior households would be affected.

“I like the measured approach, and I like supporting our seniors,” said Delegate Clay Riley, R-Harrison.